About Financial Stability
Financial System Stability is one of the overall key objectives of the Bank of Papua New Guinea (BPNG). The size of the PNG financial system is over K40 billion, which is over 98 percent of PNG’s Gross Domestic Product (GDP). As such the financial system is critical to the stability and growth of the PNG economy.
The financial system comprises of authorized deposit-taking institutions (ADIs), authorized superannuation funds (ASFs), licensed life insurance companies (LICs) and financial system development (FSD).
Approaches to Achievement of Financial Stability
In order to continue to maintain stability of the financial system, the Bank of Papua New Guinea (BPNG) utilizes a number of strategies including having in place an appropriate legislative framework, policies, procedures, processes and supervisory techniques. In addition, BPNG establishes an organizational structure (i.e. Departments and Units), recruits and train officers to ensure the risks which would threaten the stability of the financial system are detected and avoided or addressed to manageable levels.
Objectives
The other objectives of the Bank are to ensure:
- That the financial and operational soundness of each ADI, ASF and LIC is maintained,
- That interests of depositors are protected at all times,
- That interest of superannuation contributors are protected at all times, and
- That interest of life insurance policy holders are protected at all times.
Organizational Arrangement
Organizationally, BPNG’s supervision of the financial system is institutionally arranged. All ADIs are supervised by a separate department – Banking Supervision Department. All ASFs and LICs are supervised by another separate department – Superannuation & Life Insurance Supervision Department. The third department is responsible for researching, issuing and reviewing prudential standards and guidelines, licensing, compliance enforcements, macro-prudential supervision, and development functions including financial inclusion & financial literacy advocacy, and anti-money laundry/combating of terrorism financing systems development.